School of Information Systems

Business Case Assessment in the Project Lifecycle

In project lifecycle, assessing business case(s) don’t need to be performed in order, but can also in parallel/concurrently. In this note, there will be explained several points of business case assessment activities.

1. Determine Business Need

Justification of BI project is difficult only if there’s no obvious business reason for the BI application. There must be a clearly defined business information need that can’t be satisfied with traditional decision-support methods. The business should be tied to a financial consequence for the organization, either as cost overruns or lost revenue.

The financial consequence could be the result of a lost business opportunity or a business problem, e.g. lack of access to vital information, reporting inconsistencies or reliance on dirty data. Either way, we must quantify the business need as a monetary expression (E.g. $10M lost annually due to inability to cross-sell to current customers). This kind of consequences must also be included in cost-benefit analysis for further detail.

In determining business need, we should keep it simple; start with one business need that you would like BI application to satisfy. Once the initiative has proven itself profitable and once some comfort level has been attained, you can then add more functionality to the application. Don’t get easily maneuvered into a promising dollar-value ROI that a BI information is supposed to offer as it’s all guesswork; one selling experience could generate small amount while another could generate enough that it covers the entire cost of the first BI application release.

2. Assess the Current DSS Solutions

Examine the current DSS solutions and determine their deficiencies. If the current solutions don’t provide the information needed to mitigate the business problem, its reasons have to be understood. If the necessary information is not being delivered, it could be due to resources shortages and long backlogs in IT’s workload. Other reasons could include difficulty accessing and merging source data because of different key structures, missing keys, or data redundancy and inconsistencies.

3. Assess the Operational Sources and Procedures

While assessing the current DSS solutions, give special attention to the operational source data and operational procedures. The business problem could exist because the businesspeople can’t trust the information being delivered to them. Data quality problems may be the result of poor data entry practices, lack of edits, defective program code, or lack of training. A solution to the business problem may be to tighten those procedures.

4. Assess competitors’ BI DSS Initiatives

Staying ahead of the competition is extremely important in today’s economy. In order to stay ahead, you must know what your competitors are doing. It would be helpful to know about the competitors’ successes and failures with their BI decision-support initiatives and whether they have achieved higher sales or introduces innovative products.

Although it is good to learn from competitors’ decision-support. We should not implement everything that had proven to be profitable for competitors as they had different business problem as us. There is high chance of success when BI decision-support is driven by a business problem. But the opposite result is applied it’s being driven by latest trend in technology.

5. Determine the BI Application Objectives

Once the business problem has been defined and we understood the deficiencies of the current environment, we can clearly state the BI application objectives. These objectives must be compared to the organization’s strategic business goals to ensure that they are in sync. Determining all of these objectives should not be done abruptly as failures in this phase would greatly affects the efficiency (function) of BI Application

Ghia Sakanti, Raden Mikail, Verent Angelia